News

News

Mine Life Extended at Bisha Zinc-Copper Mine

June 14, 2018

June 14, 2018

Bisha Extends Mine Life at Bisha Zinc-Copper Mine

Bisha Mining Share Company (the “Company” or “BMSC”) announced today that, together with its Eritrean partner ENAMCO, the Company has approved an extension to the Bisha zinc-copper mine in Eritrea, self-funded by existing cash flows from Bisha. The open-pit extension adds 3.3 million tonnes of high-grade ore to the mill and extends operations through the full year 2022, resulting in additional payable production of 470 million pounds of zinc and 52 millions pounds of copper over this time frame. In addition to incremental production and revenue, the extension provides time for Bisha to advance assessment of the Asheli and Harena underground deposits and to consider further open-pit extensions.

Peter Kukielski, BMSC’s Chairman, said “The Bisha team has been working hard to optimize the mine plan and reduce the operational risk of the deeper ore from the main pit. The investment announced today increases the long-term cashflow from Bisha, reducing requirements for external funding for construction of our high-grade, high-return Timok project in Serbia. The extension of the Bisha mine life, combined with the planned ramp up of the Timok Upper Zone in 2022 and the longer term potential of the Timok Lower Zone, gives us confidence that the Company will continue to produce strong operating cash flows for many years to come.”

Mr. Kukielski continued, “This open pit extension is supported by the now fully implemented metallurgical improvements at Bisha, combined with continued strength in zinc and copper prices. We will have an additional open-pit extension to consider late next year and are actively evaluating underground mining at Asheli and Harena. We continue to work with our partner, ENAMCO, to maximize resource conversion to reserves.”

In August 2017, the Company decided to reduce the mine life at Bisha due to the operational risk of the original large open-pit cut-back. Since that time, Bisha has increased mining rates and significantly improved metallurgical performance, while metal prices have remained strong, leading the Company to re-visit the larger cut-back option. The open-pit extension accesses a portion of the previously envisaged cut back with an additional 3.3 million tonnes of ore over the existing reserve and assumed recoveries of 70% for copper to copper concentrate and 80% for zinc to zinc concentrate.

Several million tonnes of additional high-grade resource in the original pit design could also potentially be brought back into the mine life. The Company expects to assess investment in an additional cut-back to access this resource in late 2019. Approval will depend on performance in delivering the cost targets and increased mining rates for the extension announced today.

Updated Mining Schedule

The following mining schedule includes ore from the Bisha Main pit (current reserves plus extension) and Harena:

2018

2019

2020

2021

2022

2023

LOM Total

Bisha Main Ore Mined, Mt

2.3

2.1

2.0

2.4

0.3

9.2

Harena, Ore Mined, Mt

2.1

2.1

Waste Mined, Mt

20

30

24

14

6

95

Zinc grade, %

7.2

6.6

7.4

6.9

4.5

6.5

Copper grade, %

1.2

1.1

1.2

1.0

0.9

1.1

Updated Processing Schedule

The following processing schedule includes ore from the Bisha Main pit (current reserves plus extension), Harena and stockpiles:

2018

2019

2020

2021

2022

2023

LOM Total

Bisha Main Ore, Mt

2.3

2.2

2.0

2.4

0.4

9.3

Harena, Ore, Mt

2.0

0.1

2.1

Stockpile, Mt

0.2

0.4

0.6

Total Processed, Mt

2.3

2.4

2.4

2.4

2.2

0.1

12.0

Incremental Capital Cost

In addition to the original guidance of $15 million in sustaining capital in 2018 and the life of mine (“LOM”) sustaining capital in the Company’s most recent technical report, the incremental capital to deliver the Bisha Main extension is as follows:

2018

2019

2020

2021

2022

LOM Total

Heavy Mining Equipment (“HME”), $M

20.1

0.6

0.1

0.1

20.9

Tailing Management Facility Lift (“TMF”), $M

4.5

4.5

Other, $M

6.1

2.6

2.4

0.7

2.5

14.3

Total, $M

26.2

3.2

7.0

0.8

2.5

39.7

HME capital is primarily to purchase larger mining equipment that is expected to yield a unit mining cost 23% lower than the existing fleet. The other costs include new maintenance facilities for the larger trucks as well as other initiatives and projects to deliver the mine life extension.

All financial numbers are in US dollars unless otherwise indicated.

Forward Looking Statements

Forward-looking statements are frequently, but not always, identified by words such as “expects,” “anticipates,” “believes,” “intends,” “estimated,” “potential,” “possible” and similar expressions, or statements that events, conditions or results “will,” “may,” “could” or “should” occur or be achieved. Forward-looking statements are statements concerning the Company’s current beliefs, plans and expectations about the future including but not limited to commercial production, future production of copper and related cash flows and other events or conditions that may occur in the future, and are inherently uncertain.